Now that the effects from the deepest recession in 70 years are receding, employers are slowly adding new employees. The problem is they also may be losing some of their best and brightest.
Avoiding turnover completely is unlikely, as it may not be easy to enhance salary or benefits. But chief learning officers can mitigate the exodus by promoting development strategies to retain the workers they can least afford to lose.
According to the U.S. Department of Labor there were 3 million job openings on the last business day of April, a slight decrease from 3.1 million in March. Yet high unemployment rates linger, and many organizations remain cautious about hiring. That hasn’t hampered job seekers, however. In a press release detailing why managing talent will be even tougher in 2011, Douglas Matthews, president and chief operating officer for Right Management, a talent management company, said more than 80 percent of workers may now be actively seeking new jobs.
The Cost if They Leave
For many employers a little turnover isn’t necessarily bad news. Some executives reason that voluntary turnover is unavoidable and may serve to clear out low performers. That may be true, but the real cost should not be underestimated.
Losing talented employees is a bottom-line issue. Considering replacement expenses such as covering each vacant position, plus the cost to recruit, hire, train and orient replacement workers, turnover can cost an organization 50 to 150 percent of an employee’s annual salary.
“The immediate costs of losing talented employees is significant and can be quantified relatively accurately,” said Lisa B. Peters, chief human resources officer of BNY Mellon. “The long-term costs are more difficult to calculate, and they can have serious consequences. The impact of losing top talent at any place in the leadership pipeline may not be felt for years, but such losses truly limit an organization’s ability to fill critical roles and, ultimately, compromise a company’s competitive position.”
The Mechanics of a Development/Retention Strategy
There are several steps learning leaders can take alone and in concert with their HR peers to ensure their organizations retain top performers.
Identify the keepers. To retain talent, figure out which employees are the keepers. All workplaces are composed of top, middle and bottom performers. But cream rises to the top, and organizations can identify that top 10 to 15 percent of the workforce through performance review data and learning management reports. It also pays for CLOs to keep an eye on emerging talent and to create diverse learning activities such as job shadowing and rotation, stretch learning assignments with an internal mentor, and customer or site visits to bolster development of top performers at all levels. Further, don’t keep that information secret. It is important to let top employees know they are valued and that the organization supports their development. The goal is to motivate and encourage them.
Establish development programs for each level. Leadership development programs — whether internal or external — should target learning needs for all front-line supervisors, middle management and senior-level executives. Robust development plans should include competencies required for each level of development, as well as blended learning programs, on-the-job stretch assignments and sponsorship, and mentoring by senior executives. While building a comprehensive leadership development program is necessary to maintain bench strength, it’s also critical to retain the best and brightest. For example, a manager may progress through various management courses at different levels to gain skills for delegating, managing a function and leading an enterprise. Coursework may include foundational e-learning programs, individual and 360 assessments to target developmental goals at each level, workshops to practice skills and peer coaching to reinforce them.
Partner with HR to determine the employee engagement baseline. Widespread employee engagement problems can adversely affect even the best performers. CLOs should evaluate if their workplace culture actually fosters employee engagement. One way to find out is to partner with human resources to conduct and analyze results from an organization-wide employee engagement survey. These surveys can identify the degree to which employees connect with, or are fully involved in and enthusiastic about their work, as well as gauge their commitment to the organization and its goals. This also can help identify the value of learning and development for retention as well as target areas where learning may be necessary to bolster skill development.
Find ways to stretch employees developmentally. All employees have to deal with some mundane aspects in their work. The danger, particularly with high-performing workers, is that drudgery can take over and demotivate or demoralize. To reduce that risk and take advantage of employees’ unique skills, create special projects and temporary assignments for top performers. Beyond alleviating the boredom, these stretch assignments offer a chance for talented employees to acquire new skills and make significant contributions. It’s also an opportunity to see how top employees may perform at the next level. For example, a lower-level employee may be assigned an acting or interim role to support a top performer as he/she executes a stretch assignment.
Mentoring also can help talented employees build skills while conveying cultural expectations and standards that are not always easy to articulate or teach. Besides the benefit of shared advice and insight under the guiding hand of a more senior executive, high-performing employees tend to feel more connected to their organization when they’re mentored.
Incorporate learning into an organization’s employment brand. An organization’s employment brand is a key factor in attracting and retaining talented job candidates. The brand is a combination of current employees’ feelings about working in the company combined with how potential employees perceive that organization in the marketplace. According to the 2011 Fortune 100 Best Companies to Work For list, the employment brand is a clear, competitive advantage in the labor market. Prospective employees evaluate an organization’s brand in light of its recruiting strategies, on-boarding programs, tuition reimbursement and career development opportunities.
Companies that value, promote and market learning should advertise development opportunities and career progression ladders on their websites. New hires should receive an assessment work-up to help them identify strengths, opportunities and development goals. Tie assessments directly to the competencies and success factors high-performers possess. New hires also should be oriented to the details of the organization’s learning process — one that carries its own brand name — and the development process they will follow as they progress in their careers.
Uncover the organization’s vulnerabilities through keeper interviews. These should include questions about engagement and development opportunities such as: What could be changed to make this a better place to work? What keeps you here? What’s going well for you? What makes you excited about coming to work here? What would you like to learn or do next?
Keep in touch with the keepers. Every organization loses valued employees it would rather retain. However, goodbye doesn’t have to be forever. Former keepers can be a valuable resource beyond the exit interview with the help of an alumni network. Thanks to Facebook and LinkedIn, former employees now have a way to stay connected with each other.
For many years independent grassroots networks of former employees have operated without direct contact or active support from their former employers. However, many organizations, such as Procter & Gamble, now see the value of providing direct support for grassroots alumni organizations. Further, according to “Corporate Alumni Networks: Leveraging Intangible Assets,” a white paper published by First Tuesday Zurich, in recent years there has been an upswing in company-managed associations of former employees.
Apart from the obvious member advantages in maintaining active contacts, alumni networks also afford organizations an opportunity to retain a pool of potential future applicants. Feedback from an alumni network also can provide a company with unique insights into how its corporate culture compares with other companies, what development opportunities need to be available in the organization, and what components work best to incorporate learning into the employer brand to aid recruitment. Perhaps best of all, an alumni network allows an employer to maintain contact with top-notch former employees who may be lured back.
Talented employees are too valuable to let them just walk out the door. Savvy companies will take steps to slow the potential exodus now by building and marketing a robust development process and integrating it into the employer brand.
Jan Ferri-Reed is president of KEYGroup and co-author of Keeping the Millennials: Why Companies Are Losing Billions in Turnover to This Generation — and What to Do About It. She can be reached at editor@CLOmedia.com.